Put Options on FGEN on 7/19/2021

FibroGen, Inc. (FGEN) is a biopharmaceutical company, discovers, develops, and commercializes therapeutics to treat serious unmet medical needs.

The company is developing Roxadustat, an oral small molecule inhibitor of hypoxia inducible factor prolyl hydroxylases that is in Phase III clinical development for the treatment of anemia in chronic kidney disease in the United States and Europe; and in Phase II/III development in China for anemia associated with myelodysplastic syndromes.

It is also developing Pamrevlumab, a human monoclonal antibody that inhibits the activity of connective tissue growth factor that is in Phase III clinical development for the treatment of idiopathic pulmonary fibrosis, pancreatic cancer, liver fibrosis, and diabetic kidney disease, as well as Phase II trial for the treatment of Duchenne muscular dystrophy. 

Shares sold off sharply on Friday after a Food and Drug Administration panel voted against recommending approval for an anemia treatment from FibroGen. The panel voted 13-1 against recommending the FDA approve roxadustat in patients not dependent on dialysis. They voted 12-2 in the case of dialysis-dependent patients. We expect the weakness in shares to continue.

Last Trade: $14.35

Trading Range: $13.25 to $57.21

We will be trading August Puts

Trade Buy 1 August $15.00 Put at $2.20 For a net debit of $2.20 Profit/Loss Analysis Breakeven at $12.80 Maximum profit is unbounded Maximum loss is ($220.00) at strike of $15.00 Closing Summary Sold 1 August $15.00 Put at $3.20

Position closed on 8/19/2021 at price of $3.20 with a 45.45% gain in 31 days.

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